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ScotGems calls continuation vote

ScotGems reports losses in year-end results

On 9 March 2022, the board of ScotGems announced that it had received notice from First Sentier Investors (UK) Funds Limited that it wanted to terminate its management agreement.

The board says that it has considered carefully the future of the company including reviewing a number of proposals made to the board and consulting with the company’s largest shareholders. Throughout this process the board has taken into account the size of the company, the discount and the limited liquidity in the company’s shares.

The board wants to ensure that all shareholders have an opportunity to consider the future of the company. Accordingly, it will shortly convene a general meeting to consider an ordinary resolution on whether the company should continue. The board intends to continue consulting with shareholders and will give its recommendation on the future of the company prior to the continuation vote. The board has been considering all options for the future of the company, including a straightforward winding up.

A further update will be provided in the next few weeks.

[We are in a very similar situation here to that of Jupiter Emerging and Frontier Income. There is no trust in the sector that is trading at asset value or a premium and would make a perfect rollover vehicle. If that was the preferred route, the best option would be Mobius, which could do with being a bit bigger, but is trading on a 2.7% discount. We wouldn’t be in favour of a rollover into an open-ended vehicle. Liquidating the portfolio and handing back the cash, so that investors can reinvest in the sector at a discount should they choose, makes sense to us.]

SGEM : ScotGems calls continuation vote

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